1. Economic Outlook Energy Utilities Northwest Indiana Business Roundtable October 30, 2015

2. Who is the Indiana Energy Association? Fourteen Investor Owned Utilities operating in Indiana Energy Utilities only, i.e., electric and natural gas utilities Not rural electrics and not municipalities Serve over 4.5 million Hoosiers Employ over 10,000 people Pay over $160 million in property taxes Pay over $118 million in income taxes Pay over $243 million in sales taxes Strong supporters of economic development Strong supporters of Indiana communities and non-profits Presentation to NWIBRT – Economic Outlook - 20152

3. Utilities: Economic Outlook Utilities are strongly linked to local, national and international economy  Local o How are businesses in the area doing  National o Overall health of the economy o Interest rates o Fracking o Governmental Regulations  International o Exports and Imports Presentation to NWIBRT – Economic Outlook - 20153

4. Utilities: Current Ranking – Electric Rates Average electric rates are a snapshot in time and a state will change its ranking over time. Electric rates change over time. And individual utilities within Indiana differ from state averages. Indiana utilities face significant cost pressures including the potential requirement to comply with the Clean Power Plan – EPA’s rule to reduce CO 2 emissions. Most recent EIA data (July 2015) shows: Indiana ranked 14 th lowest for average industrial rates Indiana ranked 10 th lowest for average residential rates Indiana electric rates for industrial customers fell from July 2014 to July 2015 while 29 other states and the District of Columbia saw rate increases Similarly, average residential rates fell in Indiana while 23 other states and the District of Columbia saw rate increases. Presentation to NWIBRT – Economic Outlook - 20154

5. Utilities: Investment Outlook Over the last decade Indiana’s five investor owned electric utilities have invested $4.3 billion dollars to meet EPA regulations Regulations are continuing to impact investment strategies  EPA Clean Power Plan  Coal Ash rule  Water rules New electric generating stations  Not a great need over the next five years  Will be some renewables built Maintenance of existing plants is an ongoing part of utility operations Presentation to NWIBRT – Economic Outlook - 20155

6. Utilities: Investment Outlook Presentation to NWIBRT – Economic Outlook - 20156 Utility systems expanded rapidly in the 1950’s, 60’s and 70’s Useful Life: 50 to 70 Years Customers want reliable utility service Utility investment plans: Significant investments to upgrade and replace existing systems Planned investments will total billions of dollars Will impact all aspects of utility distribution operations Position companies to operate in a modern world  Metering  Utility system operations

7. Preparing to Meet Utility Requirements Develop the skills needed to perform work on utility systems  Operator qualifications to work on natural gas systems  Certified welders to work on utility pressure vessels and pipe systems  Qualified electrical workers  Skilled personnel on microprocessors Stay up to date on new techniques to accomplish the work safely  Like all businesses utilities need to achieve high quality at ever lower costs Enhance skills in working around customers  Much of the coming work will be done in people’s yards and streets Presentation to NWIBRT – Economic Outlook - 20157

8. Mark Maassel President mmaassel@indianaenergy.org (317) 632-4406